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Fixed Income
What should investors know about the potential impact of taxes, short-term interest rate changes and, the corporate credit cycle on fixed income markets? Our analysts also discuss additional topics that include customized liquidity management solutions and advantages of active management.
An inverted yield curve, in which yields on longer-dated bonds are below those for shorter-dated instruments, has correctly predicted the last nine U.S. recessions in the post-World War II era. However, this winning streak could be coming to an end, as the U.S. economy has displayed surprising resilience to the Federal Reserve’s tightening during the past two years.
Securitized markets have matured notably in the last 10 to 15 years and may offer attractive yields and diversification. This paper outlines the evolution of Securitized Products and how investors may benefit from allocating to the growing asset class.
Given the fluctuations in fixed income markets this year, Fort Washington anticipates that security selection will play a major role in generating alpha, as credit spreads are expected to remain range-bound and tight across most sectors. This article delves into the firm’s perspective and describes its strategy for positioning its fixed income portfolios.
In anticipation of the upcoming year, investors are eminently focused on a pivotal question: Are the Federal Reserve's interest rate hikes concluded, and is a rate reduction on the horizon for the next year? While interest rate expectations always matter, the gyrations of financial markets – stocks, bonds, and the dollar — have been dominated the past two years by expectations about what the Federal Reserve will do.
This article explains common multi-asset fixed income approaches, including Core, Core Plus, Multi-Sector, and Unconstrained fixed income strategies. A non-traditional fixed income allocation can complement Core and Core Plus strategies, act as a standalone fixed income solution for those wanting to add more portfolio risk, or serve as a substitute to equity strategies.
This article discusses Fort Washington's Strategic Income Strategy, which is designed to provide investors with a high level of current income and total return with a focus on capital protection with differentiated returns compared to traditional fixed income.
This paper outlines how the subprime auto financing and securitization industry has been tested and refined through multiple economic cycles. Investors today have a wealth of historical data useful for analyzing the universe of subprime auto asset-backed securities (ABS).
Securitized products may offer an attractive long term risk/return profile and offer alternative potential sources of both income and return. Fort Washington’s Securitized Fixed Income team focuses on thoughtfully selecting securities priced below their intrinsic value. Our highly experienced managers seek relative value opportunities in a difficult to navigate space.
In our inaugural podcast, we look back at the extraordinary volatility in credit spreads, examine what the impact has been on Investment Grade credit markets, and what we think lies ahead in these markets.
With interest rates historically low and traditional cash investments earning close to 0%, the value of optimizing short-term monies has never been more important. By fostering strong communication, thoroughly understanding clients’ cash needs, and how these needs change on a real-time basis, Fort Washington's Liquidity Management Team can provide a scope of service beyond what is typically expected of investment managers.
Understanding cash segmentation can help organizations properly balance risk, return, and liquidity. Partnering with the team at Fort Washington can help organizations manage excess cash and benefit from proper liquidity management. Active cash management requires effective and regular communication with clients, a key tenet of Fort Washington’s Liquidity Management Strategy.
Fort Washington's Multi-Asset approach overcomes shortcomings associated with traditional balanced stock/bond portfolios while adding value through active management. Improper measurement of risk and an inability to actively allocate risk can yield disappointing results, and the COVID-19 crisis is the latest example of this. Fort Washington employs two proprietary tools designed to overcome this.
Sudden changes in the municipal market over the past week occurred because of the extreme volatility in the markets since the outbreak of the coronavirus. A senior portfolio manager breaks down the one-week change in municipal yields and provides an update on the market.
Plunging bond yields and heightened stock market volatility have caused investors to worry. Our view is a further slowing of the economy is likely, but we do not yet see signs of recession.
Investment grade corporates were the worst performing major asset class in May of 2018, but now they have generated strong absolute returns of more than 10% and also outperformed both equities and other fixed income sectors on a relative basis.
Ten-year yields currently are around 2.1%, their lowest level since mid-2017, and about 115 basis points below the high of 3.25% reached last November.
Thus far in 2019, the municipal market has been one of the better performing sectors within the broader bond market, outperforming Treasuries and IG corporate bonds on a total return basis.
Over the past year, the Fed has raised short-term rates from 1% to 2% which has had a negative effect on the entire fixed income spectrum. This has been especially true within EM.
Within investment grade corporates, intermediate corporates — defined as 5-10 year maturities — may offer the most attractive risk-adjusted return potential.
Given the number of variables in the global economy, there is enormous uncertainty and biases in these forecasts and recognize them as not much more than glorified guesses.
As cash investors approached the one year anniversary of money market reform, we at Fort Washington ask, "Did you evaluate your cash management strategy?"
As communities begin the arduous task of assessing losses and rebuilding, we can begin to sift through the numbers to get a sense of the damage and potential impact on select financial markets.
Fixed Income
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